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Pages 41-49

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From page 41...
... 41 Forecasting revenue and expenditures helps agencies plan ahead and anticipate their ability to accomplish their long term goals. With the sources and uses identified in the previous chapter, the next step is to project the revenues and expenditures into the future in order to build a sustainable financial plan.
From page 42...
... 42 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management key insight into the practices states use to predict future revenue. In general, the forecasting activities at the state level focus on "traditional revenue sources: disbursements of federal funds as reimbursements for expenditures, state fuel and excise taxes, state vehicle registration fees, tolls, and local taxes and fees" (Wachs and Heimsath 2015)
From page 43...
... Financial Forecasting 43 revenue from sources like general fund allocations and local contributions that are determined by a "fixed formula" (Wachs and Heimsath 2015)
From page 44...
... 44 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management Forecasting Uses While the TAM professional of a state DOT may gather revenue forecasting information from colleagues across state and local government, the projection of uses -- or the "estimated cost of future work types" as described in the TAMP Rule -- often demands greater involvement. The TAM professional may have to coordinate with bridge engineers and pavement engineers on construction cost inflation assumptions and discount rates (see discussion of these below)
From page 45...
... Financial Forecasting 45 a forecast on "historical costs for projects of comparable scale and design." For operating and maintenance costs, FHWA suggests using "historic data applied on a per-lane mile and functional classification basis or an annual lump sum basis" (FHWA Office of Planning, Environment, & Realty 2017)
From page 46...
... 46 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management inflation assumptions, it is still important to estimate future inflation when using management system models, as these work either in real or constant dollars (dollars that exclude inflation) or incorporate inflation explicitly.
From page 47...
... Financial Forecasting 47 could illustrate the effects of decreased transportation funding. Different scenarios help identify gaps in funding expectations versus needs.
From page 48...
... 48 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management an econometric model? What assumptions are made about forecasting federal, state, and local funding?
From page 49...
... Financial Forecasting 49 Also, at this stage it is important to ensure agreement on the level of funding to include in the financial plan. For example, some managers may want to demonstrate drastic underfunding (e.g., a cut in funding of 50%)

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